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August 11, 2026STUDY: WORKFORCE AGING AND LABOUR PRODUCTIVITY On July 22, 2026, Statistics Canada released a new study examining the relationship between workforce aging and labour productivity at Canadian firms. The study finds that productivity generally rises with workforce age until workers reach their 40s, then declines modestly.
The study uses linked employer-employee and firm-level data covering Canadian firms from 2001 to 2022. It examines how the average age of a firm’s workforce is associated with labour productivity after controlling for capital intensity, firm size, firm age, industry, location and workforce characteristics. In the study, firm-level labour productivity is measured as real value added per employee.
It shows that Canada’s workforce aged considerably over the study period. The proportion of firms with an average worker age above 40 increased from 26.2% in 2001 to 42.3% in 2022. The average within-firm share of workers aged 55 and older doubled from 9.3% to 18.8%. It documents several key patterns:
- Firm productivity generally rises with average worker age and peaks when a firm’s average worker is in their 40s.
- Firms with peak labour productivity are estimated to be 8.8% more productive than firms with an average worker age of 25 or younger.
- Firms with peak labour productivity are only 1.0% more productive than firms with an average worker age of 56 or older, suggesting that the decline is relatively modest.
The relationship differs substantially across industries. In construction and manufacturing productivity peaks earlier, at an average workforce age of 36 to 40, then declines more sharply. In construction, firms in the peak age category are estimated to be 1.9% more productive than firms in the youngest category, compared with 6.4% in manufacturing and 9.4% in the combined trade and transportation group.
In wholesale trade, retail trade, transportation and warehousing, productivity peaks at an average workforce age of 41 to 45 before declining gradually. Finance and insurance is less affected: productivity peaks in the late 40s and declines only modestly thereafter, although Statistics Canada cautions that those industry estimates have greater statistical uncertainty.
Statistics Canada concludes that continued workforce aging may place increasing downward pressure on productivity growth, particularly in physically demanding industries. However, older workers also contribute experience, communication, collaboration and strategic capabilities. The implications therefore depend on the industry, occupation, technology, capital investment, management practices and opportunities for lifelong learning.
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